Oil Prices Soar as Iran-US Tensions Escalate
The Iran-US military hostilities in the Gulf have taken a worrying turn as both sides claim to have struck each other's vessels and oil tankers. The escalation has sent crude oil prices soaring, with Brent futures breaching $100 a barrel.
The latest developments come after the US Central Command said it had destroyed five Iranian crude oil tankers in response to what it called 'aggressive' behavior by Iran. In retaliation, Iran's Revolutionary Guard claimed to have struck two US vessels and eight oil tankers in the Gulf.
Goldman Sachs' co-head of global commodities research, Daan Struyven, said that prices driving above $120 is 'definitely plausible'. The inflationary fallout from higher oil prices has already been felt globally, with Chinese wholesale inflation topping expectations and the UK's Bank of England Governor warning of upside risks.
The negative sentiment is playing out in stock markets, with the Dow closing 600 points lower in back-to-back losses. The LIV Golf venture has also filed for Chapter 11 bankruptcy protection after its key backer indicated it would pull funding.